Nuclear Energy
DOE's Next Generation Nuclear Plant Project Is at an Early Stage of Development Gao ID: GAO-06-1110T September 20, 2006Under the administration's National Energy Policy, the Department of Energy (DOE) is promoting nuclear energy to meet increased U.S. energy demand. In 2003, DOE began developing the Next Generation Nuclear Plant, an advanced nuclear reactor that seeks to improve upon the current generation of operating commercial nuclear power plants. DOE intends to demonstrate the plant's commercial application both for generating electricity and for using process heat from the reactor for the production of hydrogen, which then would be used in fuel cells for the transportation sector. The Energy Policy Act of 2005 required plant design and construction to be completed by 2021. This testimony, which summarizes a GAO report being issued today (GAO-06-1056), provides information on DOE's (1) progress in meeting its schedule for the Next Generation Nuclear Plant project and (2) approach to ensuring the project's commercial viability. For the report, GAO reviewed DOE's research and development (R&D) plans for the project and the reports of two independent project reviews, observed R&D activities, and interviewed DOE, Nuclear Regulatory Commission (NRC), and industry representatives.
DOE has prepared and begun to implement plans to meet its schedule to design and construct the Next Generation Nuclear Plant by 2021, as required by the Energy Policy Act of 2005. Initial R&D results are favorable, but DOE officials consider the schedule to be challenging, given the amount of R&D work that remains to be conducted. For example, while researchers have successfully demonstrated the manufacturing of coated particle fuel for the reactor, the last of eight planned fuel tests is not scheduled to conclude until 2019. DOE plans to initiate the design and construction phase in fiscal year 2011, if the R&D results support proceeding with the project. The act also requires that DOE and NRC develop a licensing strategy for the plant by August 2008. The two agencies are in the process of finalizing a memorandum of understanding to begin work on this requirement. DOE is just beginning to obtain input from potential industry participants that would help determine the approach to ensuring the commercial viability of the Next Generation Nuclear Plant. In the interim, DOE is pursuing a more technologically advanced approach, compared with other options, and DOE has implemented some (but not all) of the recommendations made by two advisory groups. For example, as recommended by one advisory group, DOE lessened the need for R&D by lowering the reactor's planned operating temperature. In contrast, DOE has not accelerated its schedule for completing the plant, as recommended by the Nuclear Energy Research Advisory Committee. The committee was concerned that the time frame for completing the plant is too long to be attractive to industry, given that other advanced reactors may be available sooner. However, DOE believes the approach proposed by the committee would increase the risk of designing a plant that ultimately would not be commercially viable. GAO believes DOE's problems with managing other major projects call into question its ability to accelerate design and completion of the Next Generation Nuclear Plant.
GAO-06-1110T, Nuclear Energy: DOE's Next Generation Nuclear Plant Project Is at an Early Stage of Development
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Testimony:
Before the Subcommittee on Energy and Resources, Committee on
Government Reform, House of Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 2:00 p.m. EDT:
Wednesday, September 20, 2006:
Nuclear Energy:
DOE's Next Generation Nuclear Plant Project Is at an Early Stage of
Development:
Statement of Jim Wells, Director:
Natural Resources and Environment:
GAO-06-1110T:
GAO Highlights:
Highlights of GAO-06-1110T, a testimony before the Subcommittee on
Energy and Resources, Committee on Government Reform, House of
Representatives
Why GAO Did This Study:
Under the administration‘s National Energy Policy, the Department of
Energy (DOE) is promoting nuclear energy to meet increased U.S. energy
demand. In 2003, DOE began developing the Next Generation Nuclear
Plant, an advanced nuclear reactor that seeks to improve upon the
current generation of operating commercial nuclear power plants. DOE
intends to demonstrate the plant‘s commercial application both for
generating electricity and for using process heat from the reactor for
the production of hydrogen, which then would be used in fuel cells for
the transportation sector. The Energy Policy Act of 2005 required plant
design and construction to be completed by 2021.
This testimony, which summarizes a GAO report being issued today (GAO-
06-1056), provides information on DOE‘s (1) progress in meeting its
schedule for the Next Generation Nuclear Plant project and (2) approach
to ensuring the project‘s commercial viability. For the report, GAO
reviewed DOE‘s research and development (R&D) plans for the project and
the reports of two independent project reviews, observed R&D
activities, and interviewed DOE, Nuclear Regulatory Commission (NRC),
and industry representatives.
What GAO Found:
DOE has prepared and begun to implement plans to meet its schedule to
design and construct the Next Generation Nuclear Plant by 2021, as
required by the Energy Policy Act of 2005. Initial R&D results are
favorable, but DOE officials consider the schedule to be challenging,
given the amount of R&D work that remains to be conducted. For example,
while researchers have successfully demonstrated the manufacturing of
coated particle fuel for the reactor, the last of eight planned fuel
tests is not scheduled to conclude until 2019. DOE plans to initiate
the design and construction phase in fiscal year 2011, if the R&D
results support proceeding with the project. The act also requires that
DOE and NRC develop a licensing strategy for the plant by August 2008.
The two agencies are in the process of finalizing a memorandum of
understanding to begin work on this requirement.
DOE is just beginning to obtain input from potential industry
participants that would help determine the approach to ensuring the
commercial viability of the Next Generation Nuclear Plant. In the
interim, DOE is pursuing a more technologically advanced approach,
compared with other options, and DOE has implemented some (but not all)
of the recommendations made by two advisory groups. For example, as
recommended by one advisory group, DOE lessened the need for R&D by
lowering the reactor‘s planned operating temperature. In contrast, DOE
has not accelerated its schedule for completing the plant, as
recommended by the Nuclear Energy Research Advisory Committee. The
committee was concerned that the time frame for completing the plant is
too long to be attractive to industry, given that other advanced
reactors may be available sooner. However, DOE believes the approach
proposed by the committee would increase the risk of designing a plant
that ultimately would not be commercially viable. GAO believes DOE‘s
problems with managing other major projects call into question its
ability to accelerate design and completion of the Next Generation
Nuclear Plant.
Figure: Actual Size and Magnified Views of the Coated Particle Fuel:
[See PDF for Image]
Sources: General Atomics (left); DOE (right).
[End of Figure]
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-1110T].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Jim Wells at (202) 512-
3841 or wellsj@gao.gov.
[End of Section]
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here to discuss the Department of Energy's (DOE)
progress on its Next Generation Nuclear Plant demonstration project. My
testimony is based on our report being issued today, entitled Nuclear
Energy: Status of DOE's Effort to Develop the Next Generation Nuclear
Plant (GAO-06-1056). As you know, the administration's National Energy
Policy calls for the greater use of nuclear power and hydrogen to meet
the nation's growing energy needs. The purpose of the Next Generation
Nuclear Plant project is to establish the technical and commercial
feasibility of producing both electricity and hydrogen from an advanced
nuclear reactor. DOE has been engaged since fiscal year 2003 in
research and development (R&D) on such a plant. The Energy Policy Act
of 2005 formally established the Next Generation Nuclear Plant as a DOE
project and set further requirements for the project's implementation,
including obtaining a license from the Nuclear Regulatory Commission
(NRC) to operate the plant and completing the project by fiscal year
2021.[Footnote 1] DOE estimates the total cost of the plant to be
approximately $2.4 billion. The act also designated DOE's Idaho
National Laboratory as the lead laboratory and construction site for
the plant and gave it responsibility for carrying out cost-shared R&D,
design, and construction with industry partners. The Idaho National
Laboratory has considerable experience with nuclear energy
technologies. Since 1949, 52 nuclear reactors have been designed and
tested at the site.
DOE has chosen the "very-high-temperature reactor," which is cooled by
helium gas, as the advanced reactor design for the Next Generation
Nuclear Plant. As its name implies, this reactor would operate at a
much higher temperature than existing nuclear power plants--up to about
950 degrees Celsius (1,742 degrees Fahrenheit). This temperature would
be roughly three times the temperature of a light water reactor, which
is cooled by water and is the technology generally in use in the United
States and around the world. Despite the high temperature, there is
general agreement that a gas-cooled reactor offers the potential for
improved safety. In addition, DOE considers the very-high-temperature
reactor to be the nearest-term advanced nuclear reactor design that
operates at temperatures high enough to generate the heat (called
"process heat") needed to produce hydrogen. Under the administration's
National Hydrogen Fuel Initiative, hydrogen is envisioned to be used in
fuel cells for the transportation sector as an alternative to imported
oil.
Over the course of the last several years, two independent groups have
reviewed DOE's plans for the Next Generation Nuclear Plant. The
Independent Technology Review Group--coordinated by the Idaho National
Laboratory and composed of an international group experienced in the
design, construction, and operation of nuclear systems--issued a report
in 2004 on the design features and technological uncertainties of the
very-high-temperature reactor. The report concluded that the
uncertainties associated with the project appeared manageable and that
the project's objectives could be achieved.[Footnote 2] In 2006, as
required by the Energy Policy Act of 2005, DOE's Nuclear Energy
Research Advisory Committee also completed an initial review of the
project.[Footnote 3] The advisory committee reviewed DOE's R&D plans in
light of the Independent Technology Review Group's report and
recommended that DOE accelerate the project. Both reviews also made
recommendations to modify DOE's R&D plans to ensure the project's
success.
DOE is managing the Next Generation Nuclear Plant under its project
management process for the acquisition of capital assets, which sets
forth planning requirements that have to be met before DOE may begin
design or construction activities. The goal of these requirements is to
complete projects on schedule, within budget, and capable of meeting
performance objectives. Our reviews of DOE's management of other major
projects have found that project management has long been a significant
challenge for DOE and is at high risk of waste and
mismanagement.[Footnote 4] In an effort to improve cost and schedule
performance, DOE issued new policy and guidance on managing and
controlling projects in 2000, but performance problems continue on
major projects. For example, we testified in April 2006 that DOE's fast-
track approach to designing and building the Waste Treatment Plant
Project at DOE's Hanford site in Washington state increases the risk
that the completed facilities may require major rework to operate
safely and effectively and could increase the project's costs.[Footnote
5]
My testimony discusses the results of our report being issued to you
today and addresses DOE's (1) progress in meeting its schedule for the
Next Generation Nuclear Plant and (2) approach to ensuring the
commercial viability of the project, including how DOE has implemented
the recommendations of the two advisory groups. For the report, we
analyzed DOE's project plans, interviewed DOE and Idaho National
Laboratory officials, and observed R&D efforts at Idaho National
Laboratory. Furthermore, we reviewed the two independent assessments of
the project and how DOE had responded to their recommendations. We also
reviewed NRC documentation related to the development of a licensing
strategy for the Next Generation Nuclear Plant, and we interviewed DOE
and NRC officials regarding licensing issues. We performed our work
from April to September 2006 in accordance with generally accepted
government auditing standards.
Summary:
DOE has prepared an R&D schedule designed to support the design and
construction of the Next Generation Nuclear Plant by fiscal year 2021,
as set forth in the Energy Policy Act of 2005. Initial R&D results have
been favorable, but DOE officials consider this schedule to be
challenging, given the amount of R&D that remains to be conducted. For
example, DOE officials told us that researchers have successfully
demonstrated in a laboratory setting the manufacturing of nuclear fuel
for the reactor, which is critical to the plant's operation. The first
of eight planned experiments to irradiate the fuel in order to test how
well it performs will not begin until early in fiscal year 2007, and
the final experiment is not scheduled to end until fiscal year 2019.
DOE plans to initiate design work in fiscal year 2011, but only if the
R&D results support proceeding with design and construction of the
plant. With regard to licensing the Next Generation Nuclear Plant, DOE
and NRC are in the process of finalizing a memorandum of understanding
so that the two agencies can work together to develop a licensing
strategy by August 2008, as required by the Energy Policy Act of 2005.
In the long term, NRC will need to address "skill gaps" related to the
agency's capability to license a gas-cooled reactor such as the Next
Generation Nuclear Plant. A 2001 NRC assessment identified these skill
gaps, but the commission has taken limited action to address them
because until recently it had not anticipated receiving a license
application for a gas-cooled reactor.
DOE's approach to ensuring the commercial viability of the Next
Generation Nuclear Plant is to significantly advance existing gas-
cooled reactor technology in order to support the development of a
plant design that utilities and other end users will be interested in
deploying to help meet the nation's energy needs. For example, if
successful, DOE's R&D would enable the reactor to operate at a higher
temperature compared with other high-temperature gas-cooled reactors.
The higher temperature would result in more efficient fuel use and
hydrogen production and thus would be a more economically attractive
plant. In addition, DOE is seeking industry involvement on the design
of the plant and the business considerations for deploying it. In some
cases, DOE officials' views on how best to achieve technological
advances and ensure the commercial viability of the plant differ from
the two independent advisory groups that have reviewed DOE's plans, and
DOE has implemented some but not all of the advisory groups'
recommendations. For example, in accordance with a recommendation of
the Independent Technology Review Group, DOE lessened the need for R&D
on advanced materials by lowering the planned operating temperature of
the reactor from 1,000 degrees Celsius to no more than 950 degrees
Celsius. In contrast, DOE has not implemented recommendations to scale
back other planned technological advances or accelerate its schedule
for completing the plant. For example, the Nuclear Energy Research
Advisory Committee had recommended accelerating the schedule to make
the plant more attractive to industry compared with other advanced gas-
cooled reactors that may be available sooner and thus attract greater
industry participation.
DOE believes accelerating the project would increase project risk--for
example, the risk of cost overruns or a failure to meet project
specifications--and would require significant additional resources that
are not in keeping with the department's current priorities. According
to DOE officials, additional R&D conducted early in the project would
reduce overall project risk but would require additional resources.
However, DOE has limited funding for nuclear energy R&D and has given
other projects, such as developing the capability to recycle fuel from
existing nuclear power plants, priority over the Next Generation
Nuclear Plant.
Background:
One of DOE's strategic goals is to promote a diverse supply of
reliable, affordable, and environmentally sound energy. To that end,
DOE is promoting further reliance on nuclear energy under the
administration's National Energy Policy.[Footnote 6] According to DOE
officials, the department has three priorities for promoting nuclear
energy. The first priority is deploying new advanced light water
reactors under the Nuclear Power 2010 program. The second priority is
the Global Nuclear Energy Partnership, launched in February 2006. The
partnership's objectives are to demonstrate and deploy new technologies
to recycle nuclear fuel and minimize nuclear waste, and to enable
developing nations to acquire and use nuclear energy while minimizing
the risk of nuclear proliferation. The third priority is R&D on the
Next Generation Nuclear Plant. According to DOE officials, the
department remains committed to this project even though the Global
Nuclear Energy Partnership has assumed a higher priority.
DOE is engaged in R&D on the Next Generation Nuclear Plant as part of a
larger international effort to develop advanced nuclear reactors
(Generation IV reactors) that are intended to offer safety and other
improvements over the current generation of nuclear power plants
(Generation III reactors). DOE coordinates its R&D on advanced nuclear
reactors through the Generation IV International Forum, chartered in
2001 to establish a framework for international cooperation in R&D on
the next generation of nuclear energy systems.[Footnote 7] In 2002, the
Generation IV International Forum (together with DOE's Nuclear Energy
Research Advisory Committee) identified what it considered the six most
promising nuclear energy systems for further research and potential
deployment by about 2030. DOE has selected one of the six advanced
nuclear systems--the very-high-temperature reactor--as the design for
its Next Generation Nuclear Plant, in part because it is considered to
be the nearest-term reactor design that also has the capability to
produce hydrogen. According to DOE officials, the very-high-temperature
reactor is also the design with the greatest level of participation
among the Generation IV International Forum members.
Furthermore, the very-high-temperature reactor builds on previous
experience with gas-cooled reactors. For example, DOE conducted R&D on
gas-cooled reactors throughout the 1980s and early 1990s, and two gas-
cooled reactors have previously been built and operated in the United
States. The basic technology for the very-high-temperature reactor also
builds on previous efforts overseas, in particular high-temperature gas-
cooled reactor technology developed in England and Germany in the
1960s, and on technologies being advanced in projects at General
Atomics in the United States, the AREVA company in France, and at the
Pebble Bed Modular Reactor company in South Africa. In addition, Japan
and China have built small gas-cooled reactors.
DOE Has Made Initial Progress Toward Meeting Near-Term Milestones for
the Next Generation Nuclear Plant:
DOE has developed a schedule for the R&D, design, and construction of
the Next Generation Nuclear Plant that is intended to meet the
requirements of the Energy Policy Act of 2005, which divides the
project into two phases. For the first phase, DOE has been conducting
R&D on fuels, materials, and hydrogen production. DOE also recently
announced its intent to fund several studies on preconceptual, or
early, designs for the plant. DOE plans to use the studies, which are
expected to be completed by May 2007, to establish initial design
parameters for the plant and to further guide R&D efforts.
DOE is planning to begin the second phase in fiscal year 2011 by
issuing a request for proposal that will set forth the design
parameters for the plant. If R&D results at that time do not support
the decision to proceed, DOE may cancel the project. Assuming a request
for proposal is issued, DOE is planning to choose a design by 2013 from
among those submitted by reactor vendors. Construction is scheduled to
begin in fiscal year 2016, and the plant is expected to be operational
by 2021. In addition, DOE is planning for the appropriate licensing
applications for the plant to be submitted for NRC review and approval
during the second phase of the project. See figure 1 for the overall
Next Generation Nuclear Plant project schedule.
Figure 1: Next Generation Nuclear Plant Project Schedule:
[See PDF for image]
Source: DOE.
[End of figure]
As scheduled by DOE, the Next Generation Nuclear Plant project is
expected to cost approximately $2.4 billion, part of which is to be
funded by industry. According to DOE officials, the department budgeted
about $120 million for the project from fiscal years 2003 through 2006.
This amount includes about $80 million for R&D on the nuclear system of
the plant and about $40 million for R&D on the hydrogen production
system.
Initial research results since DOE initiated R&D on the Next Generation
Nuclear Plant project in 2003 have been favorable, but the most
important R&D has yet to be done. For example, DOE is planning a series
of eight fuel tests in the Advanced Test Reactor at Idaho National
Laboratory. Each test is a time-consuming process that requires first
fabricating the fuel specimens, then irradiating the fuel for several
years, and finally conducting the postirradiation examination and
safety tests. DOE is at the beginning of the process. In particular,
DOE officials said they have successfully fabricated the fuel for the
first test and addressed previous manufacturing problems with U.S. fuel
development efforts in which contaminants weakened the coated particle
fuel. However, the irradiation testing of the fuel in the Advanced Test
Reactor has not yet begun. The first test is scheduled to begin early
in fiscal year 2007 and to be completed in fiscal year 2009. The eighth
and final test is scheduled to begin in fiscal year 2015, and the fuel
testing program is scheduled to conclude in fiscal year 2019. As a
result, DOE will not have the final results from all of its fuel tests
before both design and construction begin.[Footnote 8] While DOE has
carefully planned the fuel tests and expects favorable results, a DOE
official acknowledged that they do not know if the fuel tests will
ultimately be successful.
DOE is also at the beginning stages of R&D on other key project areas
such as the hydrogen production system for the plant and materials
development and testing. For example, Idaho National Laboratory
successfully completed a 1,000-hour laboratory-scale test of one of two
potential hydrogen production systems in early 2006. DOE ultimately
plans to complete a commercial-scale hydrogen production system for
demonstration by fiscal year 2019, which will allow time to test the
system before linking it to the very-high-temperature reactor. DOE also
has selected and procured samples of graphite--the major structural
component of the reactor core that will house the nuclear fuel and
channel the flow of helium gas--and designed experiments for testing
the safety and performance of the samples. Nevertheless, much of the
required R&D for the graphite has not yet begun and is not scheduled to
be completed until fiscal year 2015.
Regarding licensing of the plant, DOE and NRC are in the process of
finalizing a memorandum of understanding that will establish a
framework for developing a licensing strategy. As required by the
Energy Policy Act of 2005, DOE and NRC are to jointly submit a
licensing strategy by August 2008.[Footnote 9] NRC has drafted a
memorandum of understanding and submitted it to DOE, but its approval
has been delayed by additional negotiations on details of the
agreement. Nevertheless, NRC has already taken certain other actions to
support licensing the Next Generation Nuclear Plant. In particular, NRC
has been developing a licensing process that could be used for advanced
nuclear reactor designs and that would provide an alternative to its
current licensing framework, which is structured toward light water
reactors.
In addition to developing a licensing strategy, NRC will need to
enhance its technical capability to review a license application for a
gas-cooled reactor, such as the Next Generation Nuclear Plant. In 2001,
NRC completed an assessment of its readiness to review license
applications for advanced reactors. The assessment identified skill
gaps in areas such as accident analysis, fuel, and graphite, which
apply to gas-cooled reactors.[Footnote 10] Furthermore, NRC identified
a "critical" skill gap in inspecting the construction of a gas-cooled
reactor. As a result of its 2001 assessment, NRC issued a detailed plan
in 2003 to address the gaps in expertise and analytical tools needed to
license advanced reactors, including gas-cooled reactors. However, NRC
has since taken limited steps to enhance its technical capabilities
related to gas-cooled reactors because, until recently, it had not
anticipated receiving a license application for a gas-cooled reactor.
DOE Is Pursuing a More Technologically Advanced Approach Than Other
Options in an Effort to Ensure the Plant's Commercial Viability:
DOE is beginning to obtain input from potential industry participants
that would help DOE determine its approach to ensuring the commercial
viability of the Next Generation Nuclear Plant. In the interim, DOE is
pursuing a more technologically advanced approach--with regard to size,
fuel type, and the coupling of electricity generation and hydrogen
production in one plant--compared with the recommendations of the
Independent Technology Review Group and the Nuclear Energy Research
Advisory Committee. These technological advances require substantial
R&D on virtually every major component of the plant. For example, the
advanced uranium fuel composition that DOE is researching is not proven
and requires fundamental R&D.
The Independent Technology Review Group cautioned that attempting to
achieve too many significant technological advances in the plant could
result in it becoming an exercise in R&D that fails to achieve its
overall objectives, including commercial viability. Another key factor
likely to affect the plant's commercial viability is the time frame for
its completion. For example, the plant's commercial attractiveness
could be affected by competition with other high-temperature gas-cooled
reactors under development and potentially available sooner, such as
one in South Africa, although these other reactor designs would also
need to be licensed by NRC before being deployed in the United States.
DOE acknowledges the risk of designing and building a plant that is not
commercially viable and has taken initial steps to address this
challenge. For example, DOE has established what it considers to be
"aggressive but achievable" goals for the plant, such as producing
hydrogen at a cost low enough to be competitive with gasoline.
Furthermore, DOE is beginning to obtain industry input to help the
department develop an approach for ensuring the commercial viability of
the plant. DOE initiated two efforts in July 2006 to obtain input from
industry on the design of the plant and the business considerations of
deploying the plant. Specifically, DOE announced its intent to fund
multiple industry teams to develop designs (and associated cost
estimates) for every aspect of the plant, including the reactor and
hydrogen production technology, by May 2007. In addition, DOE began
participating in meetings with representatives from reactor vendors,
utilities, and potential end users in order to obtain their insight
into the market conditions under which the plant would be commercially
viable. Until DOE develops a better understanding of the business
requirements for the Next Generation Nuclear Plant, DOE is conducting
R&D to support two distinct designs of the very-high-temperature
reactor--pebble bed and prismatic block--rather than focusing on one
design that may ultimately be found to be less commercially
attractive.[Footnote 11]
As recommended by the Independent Technology Review Group, DOE revised
its R&D plans to lessen the technological challenges of designing and
building the Next Generation Nuclear Plant. Most importantly, it
reduced the planned operating temperature of the reactor from 1,000
degrees Celsius to no more than 950 degrees Celsius. According to Idaho
National Laboratory officials, this small reduction is significant
because it enables DOE to use existing metals rather than develop
completely new classes of materials.
DOE, however, has not adopted other recommendations--in particular to
revise its R&D plans to focus on a uranium dioxide fuel kernel, which
has been more widely used and researched than the advanced uranium
oxycarbide fuel kernel DOE is currently researching.[Footnote 12] The
Independent Technology Review Group considered DOE's fuel R&D plan on
an advanced uranium fuel composition more ambitious than necessary and
concluded that focusing on the more mature fuel technology would reduce
the risk of not meeting the schedule for the plant. Nevertheless, DOE
has continued to focus on the advanced uranium oxycarbide fuel because
it has the potential for better performance. DOE officials also told us
that the most significant challenge with regard to the fuel is not its
composition but rather the coatings, which is independent of the fuel
kernel composition. To respond to the recommendation, DOE decided to
test the performance of the two types of fuel kernels side-by-side as
part of its fuel R&D plan.
The Nuclear Energy Research Advisory Committee also recommended that
DOE re-evaluate the project's dual mission of demonstrating both
electricity and hydrogen production. Although the advisory committee
did not recommend what the project's focus should be--electricity
generation or hydrogen production--it wrote that the dual mission would
be much more challenging and require more funding than either mission
alone. Instead, DOE's R&D is currently supporting both missions, and
DOE officials said they consider the ability to produce hydrogen (or to
use process heat for other applications) key to convincing industry to
invest in the Next Generation Nuclear Plant rather than advanced light
water reactors similar to the current generation of nuclear power
plants operating in the United States.
Moreover, a key Nuclear Energy Research Advisory Committee
recommendation was to accelerate the project and deploy the plant much
earlier than planned by DOE in order to increase the likelihood of
participation by industry and international partners. Representatives
of the Nuclear Energy Institute, which represents utilities that
operate nuclear power plants, also told us that accelerating the
project would increase the probability of successfully commercializing
the plant. As one possible approach to acceleration, the advisory
committee further recommended that DOE design the Next Generation
Nuclear Plant to be a smaller reactor that could be upgraded and
modified as technology advances. However, DOE officials consider the
advisory committee's schedule high risk and doubt that the degree of
acceleration recommended could be achieved. Furthermore, according to
DOE officials, a smaller reactor would require the same R&D as a larger
reactor but would not support future NRC licensing of a full-scale
plant, which is critical to the plant's commercial viability.
Idaho National Laboratory officials also consider the schedule proposed
by the advisory committee to be high risk, potentially resulting in the
need to redo design or construction work. Nevertheless, the laboratory
has also proposed accelerating the schedule, though to a lesser extent
than recommended by the advisory committee. According to laboratory
officials, if DOE does not begin design sooner than currently planned,
too much R&D and design work will be compressed into a short time frame
after DOE begins design in fiscal year 2011, and the department will
not be able to complete the plant by fiscal year 2021. Consequently,
the laboratory has proposed beginning design earlier than planned by
DOE, which would also reduce the scope of the R&D by focusing on fewer
design alternatives. The laboratory's proposed schedule would result in
completing the plant up to 3 years earlier than under DOE's schedule.
While the laboratory's proposed schedule would slightly reduce the
project's total cost estimate, it would require that DOE provide more
funding in the near term. For example, in fiscal year 2007, Idaho
National Laboratory estimates that R&D on the very-high-temperature
reactor design would need to be increased from $23 million (the amount
requested by DOE in its fiscal year 2007 budget submission) to $100
million.
DOE officials believe that the laboratory's current proposed schedule
is the best option for the plant and stated that they would consider
accelerating it if there were adequate funding and sufficient demand
among industry end users to complete the project sooner. In addition,
DOE officials said that even if the schedule is not accelerated,
increasing the funding for the project would enable additional R&D to
be conducted to increase the likelihood that the plant is completed by
fiscal year 2021. For example, DOE officials stated that its current
R&D plans for the very-high-temperature reactor design could support
doubling the department's fiscal year 2007 budget request of $23
million. However, DOE has limited funding for nuclear energy R&D and
has given other projects, such as developing the capability to recycle
fuel from existing nuclear power plants, priority over the Next
Generation Nuclear Plant.
Concluding Observations:
While DOE is making progress in implementing its plans for the Next
Generation Nuclear Plant, these efforts are at the beginning stages of
a long project and it is too soon to determine how successful DOE will
be in designing a technically and commercially viable plant. As we note
in our report, it is also too soon, in our view, to support a decision
to accelerate the project. Accelerating the schedule would require that
DOE narrow the scope of its R&D and begin designing the plant before
having initial research results on which to base its design decisions.
This could result in having to redo work if future research results do
not support DOE's design decisions. In addition, DOE has only recently
begun to systematically involve industry in the project. Such input is
critical to key decisions, such as whether DOE should design a less
technologically advanced plant that is available sooner rather than a
larger, more technologically advanced plant that requires more time to
develop. Finally, DOE's history of problems managing large projects on
budget and within schedule raises concerns about the department's
ability to complete the Next Generation Nuclear Plant in the time frame
set forth in the Energy Policy Act of 2005, and accelerating the
schedule would only add to these concerns.
Mr. Chairman, this concludes my prepared statement. I would be happy to
respond to any questions that you or other Members of the Subcommittee
may have.
GAO Contact and Staff Acknowledgments:
For further information about this testimony, please contact me at
(202) 512-3841 or wellsj@gao.gov. Raymond H. Smith Jr. (Assistant
Director), Joseph H. Cook, John Delicath, and Bart Fischer made key
contributions to this testimony.
FOOTNOTES
[1] Pub. L. No. 109-58 (2005).
[2] Idaho National Engineering and Environmental Laboratory, Design
Features and Technology Uncertainties for the Next Generation Nuclear
Plant, INEEL/EXT-04-01816 (Idaho Falls, Idaho; June 30, 2004).
[3] The Nuclear Energy Research Advisory Committee was established in
1998 to provide independent advice to DOE on complex science and
technical issues associated with the planning, management, and
implementation of DOE's nuclear energy program.
[4] GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.:
January 2005); and High-Risk Series: An Update, GAO-03-119 (Washington,
D.C.: January 2003).
[5] GAO, Hanford Waste Treatment Plant: Contractor and DOE Management
Problems Have Led to Higher Costs, Construction Delays, and Safety
Concerns, GAO-06-602T (Washington, D.C.: Apr. 6, 2006).
[6] While DOE is the federal agency tasked with promoting nuclear
energy, NRC is responsible for ensuring public health and safety with
regard to nuclear power.
[7] Members of the Generation IV International Forum include Argentina,
Brazil, Canada, the European Atomic Energy Community (Euratom), France,
Japan, South Africa, South Korea, Switzerland, the United Kingdom, and
the United States. In July 2006, DOE announced that China and Russia
are also expected to join the forum.
[8] Under DOE's fuel R&D plan, the results from the first six tests
would be available before construction begins, and the results from the
final two tests would be available before completion of the plant.
[9] The act also directs DOE to seek NRC's active participation
throughout the duration of the project--for example, to avoid design
decisions that would compromise safety or impair the accessibility of
safety-related components for inspection and maintenance.
[10] As defined in the Future Licensing and Inspection Readiness
Assessment, published by NRC in September 2001, skill gaps occur when
individuals with technical expertise are working in other areas within
the agency, are near retirement or are expected to leave the agency, or
do not exist in the agency.
[11] The pebble bed design uses fuel particles formed into billiard-
ball-size graphite spheres that slowly move through the reactor core in
a continuous refueling process. In the prismatic block design, fuel
particles are formed into cylindrical rods that are loaded into large
graphite blocks making up the reactor core, which is periodically
refueled in a batch process.
[12] The fuel is composed of a small uranium kernel that is coated with
several protective layers. Whereas the more widely researched fuel
kernel is composed of uranium dioxide, the advanced composition
incorporates both uranium dioxide and uranium oxycarbide.
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